|  | | 2010 News and Press Releases | | |
HEADLINE NEWS:
Proposal Would Expand Reporting of Money Transfers
Sewell Chan
New York Times. September 27, 2010
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EXCERPT: The Treasury Department on Monday proposed a requirement for banks to make weekly reports of all electronic money transfers into and out of the United States. The expansion in data reporting is intended to help combat terrorist financing, money laundering and tax evasion, but doubts have been raised about the cost and effectiveness of the plan, as well as the potential impact on privacy. Financial institutions have long been required to report all cash transactions, whether domestic or overseas, exceeding $10,000 as well as transactions that they deem to be suspicious. The proposed regulations would expand the requirements so that banks would have to report all cross-border transfers of any size, whether or not cash is involved. (For money-transfer businesses, the threshold would be $1,000 as opposed to that at banks, which would report all amounts.) Up to 300 deposit-taking banks and 700 money-services businesses, like Western Union, would be affected. Under federal rules dating to 1995, financial institutions already must internally retain records on transfers of $3,000 or more and make them available to the authorities, usually under a subpoena or warrant. What is new about the proposal, first reported by The Washington Post, is the consolidation of such data in a government repository. “By establishing a centralized database, this regulatory plan will greatly assist law enforcement in detecting and ferreting out transnational organized crime, multinational drug cartels, terrorist financing and international tax evasion,” said James H. Freis Jr., director of the Financial Crimes Enforcement Network, which is a bureau of the Treasury and is known as Fincen. In a statement, Mr. Freis said the network took into account “the exceptional benefit to law enforcement and the modest cost to industry,” and would consult with both groups “as this rule moves forward.” The rules are unlikely to take effect before 2012. |
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